Glenn Jacobs on the true cause of inequality

The wealth gap is a serious problem. The richest 20 percent of Americans now own 80 percent of the country’s wealth. Over the past three decades, the average American has seen his income either fall or remain flat. Over the same period, the top 20 percent of income-earners have enjoyed a modest rise in income while the top one percent have seen their income skyrocket.

While the left blames the free market for America’s wealth and income disparities, the real culprit is the government itself — specifically, the quasi-government Federal Reserve System.

The left’s solutions consist of the same tired nostrums: higher taxes on the wealthy, more wealth redistribution, and more government interventions in the market. Liberals want more big government, believing the market has failed and that the state must clean up the mess.

Their argument is a straw man. America does not really have a free market economy. We have central planners who control interest rates — the worst form of price fixing. At best, we have a mixed economy, containing elements of a free market but also elements of a centrally planned economy. Unfortunately, the American economy is becoming incrementally less free, a trend that has accelerated due to the financial crisis of 2007-2008.

In fact, since the financial crisis, we have witnessed unprecedented government interventions in the market — and the wealth gap has widened dramatically.